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Boeing to workers: Talks were in good faith; union’s offer fell short

Officials from The Boeing Co. sent an e-mail to employees in the Commercial Airlines Division Thursday explaining their side as to why talks between the company and the International Association of Machinists weren’t successful in landing a second 787 final assembly plant in Everett.

The message came from Ray Conner, Commercial Airplanes vice president of Supply Chain Management and Operations, and Doug Kight, Commercial Airplanes vice president of Human Resources, who took part in discussions with the union.

“You have undoubtedly heard the many reactions and opinions of people weighing in on our decision to expand our 787 production capacity to Boeing Charleston,” the letter said. “Not everything you read or hear is accurate, and that’s why we feel it’s important to share information to help your teams sort through the many perspectives.”

Tom Wroblewski, president of the local International Association of Machinists union, said Wednesday that he did not feel Boeing’s negotiations were in good faith. He said the union offered a 10-year, no-strike labor contract, which he did not think the company seriously considered. His remarks were published in a story on seattlepi.com.

The company’s letter, however, says the union’s offer did not “meet the objectives we had set out for a proposal to the board of directors.” What follows is full text from the message:

Why our discussions with the IAM were unsuccessful

You have undoubtedly heard the many reactions and opinions of people weighing in on our decision to expand our 787 production capacity to Boeing Charleston. Not everything you read or hear is accurate, and that’s why we feel it’s important to share information to help your teams sort through the many perspectives.

We’d like to emphasize that Boeing considered many complex factors in this decision. Working with the union to achieve our objectives of production stability and long-term cost competitiveness was one of those factors.

We personally participated in the dialogue with the International Association of Machinists, starting in the summer. We held talks over many weeks with both IAM international and local representatives. The talks were constructive and all participants were engaged in a good-faith effort to address the issues. During these discussions we very clearly laid out our objectives and our need to have the union’s best offer for an agreement by mid-October to enable us to prepare a recommendation for the Oct. 26 meeting of Boeing’s board of directors. The IAM gave us that final proposal on Wed., Oct. 21.

Unfortunately, that offer fell short of what would have been needed for Boeing management to recommend to the board that the second 787 line be put in Everett, Wash. The union:

Offered to extend the current contract eight years to 2020.

Included annual general wage increases of 3 percent on top of an annual cost-of-living adjustment that has added more than 1 percent a year for the last 20 years.

Required three lump-sum bonuses of $5,000 or 10 percent of earnings, whichever is greater, in 2009, 2013 and 2016.

Included an annual pension increase of $2.50 per month for the life of the agreement, taking the pension to $103.50 by 2020.

Demanded that Boeing promise to be neutral on all IAM organizing and decertification campaigns anywhere in the country.

Required that Boeing guarantee to put future airplane programs in the Puget Sound region far into the future.

Agreed to share medical cost increases, but deferred that sharing until 2018.

We told the IAM that we wouldn’t be able to make commitments on future airplanes so far into the future. And we couldn’t agree to blanket neutrality on international IAM campaigns that had nothing to do with our Puget Sound work force. Both issues were identified early as roadblocks to moving forward.

We stated that we needed an extension of at least 10 years to the current contract. We offered annual wage increases of 2 percent, a bit higher than the average increase that our IAM-represented employees have gained over the last 30 years. We offered annual pension increases at the same rate. We offered to introduce an annual incentive plan that could have boosted income annually for our employees.

In the end, we told the IAM clearly and repeatedly that their offer did not meet the objectives we had set out for a proposal to the board of directors. We asked them if they were sure that this was the best they could do on a range of issues, and they said it was. We gave them an ample, fair opportunity for discussion throughout this process, and the union was unwavering in its positions on key issues. That’s why we declined to participate in their request for 11th-hour talks.

On the positive side, we shared a lot of information with the union about the intense global competition we face, our business environment and our business issues. The union agreed to a framework on sharing future medical cost increases. We developed an approach to an incentive pay plan that would reward employees for achieving annual targets in the areas of cost, quality and productivity. We had good, constructive dialogue on a range of important issues, and we hope to build from there in regular meetings with union leadership. We remain committed to improving our relationship with the IAM.

When all is said and done, we believe that we are in the midst of one of the most exciting, dynamic times for commercial aviation. And the Puget Sound region is the hub for aerospace talent. We solve incredibly challenging technical problems every day and we work together to get the job done. Puget Sound and Charleston combined are a great engine for growth and a successful future for us all.”

Note: This is a seattlepi.com reader blog. It is not written or edited by the P-I. The authors are solely responsible for content. E-mail us at newmedia@seattlepi.com if you consider a post inappropriate.